2015 - The Year That Was in Mortgages
21/01/2016 Brian Godfrey, Mortgages and Finance Adviser
Navigating the mortgage market can be challenging at the best of times and when the authorities introduce new lending recommendations, it can be tricky to get your head around it.
A recent survey from an industry super fund-owned bank found that only 41 per cent of Australians are confident they know enough to have the right home loan for their situation – a concerning statistic given that financial literacy is one of the biggest money savers over time.
How savvy are you when it comes to understanding the world of mortgages?
The Hopkins Group is committed to helping its clients secure their financial future – and by breaking down the jargon to join you on your journey. Our expertise and knowledge gives clients the confidence and peace of mind they need to borrow money, so let’s have a look at some latest developments in the lending market and explain the implications they have.
2015 was a complex year for funding property purchases though the banks. We began the year strong with two interest rate reductions in February and May fuelling great interest in residential property.
The brakes were put on mid-year when APRA placed suggested restrictions on lenders to adopt a more cautious approach on lending.
APRA is the Australian Prudential Regulation Authority and its role is to oversee banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurance, friendly societies and most members of the superannuation industry.
The banks responded to these restrictions and in a move that challenged the ease in which entry level investors could enter the property market, they significantly reduced the maximum loan amount they were prepared to lend home buyers.
As a result, lending criteria tightened and interest rates increased in the second half of 2015 with investment loans subject to a higher rate than owner occupier loans.
From July through to November, owner occupier loans continued to grow but the same could not be said for investment loans. Property investment became a greater challenge at the entry level and by December, the major banks had significantly reduced the amount they were prepared to lend home buyers. In many cases loans on property had reduced by $65k - $80k per application.
Some lenders with fewer restrictions began to offer ‘specials’ on limited time offers as low as 3.99 per cent interest and as a result, broker loans increased as it became more imperative to shop around for the better deals.
But with so much clutter and competition out there, where do you start?
With an offering of 25 lenders to choose from, The Hopkins Group can take the hard work out and do the shopping around for you. Our experience with the property market enables us to consider the number of different lending products out there and explain how they could be tailored to your needs.
Whether you’re an investor or an owner occupier, our goal is to find the loan that suits your borrowing needs and shop around for the most suitable rates and features to maximise your funding capacity.
We don’t believe in a ‘one-size-fits-all’ approach. We know that every person’s financial situation is different, that’s why we pride ourselves on offering advice specific to you and your financial situation.
To speak with one of our mortgage brokers about your borrowing needs for the upcoming year, call 1300 726 082 to book in an appointment.
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